US open: Investors opt for caution ahead of Fed meeting, EU referendum

US investors were playing it safe on Friday afternoon, ahead of next week’s US central bank policy meeting, not to mention the following week’s EU referendum here in the UK.

As of 16:49 BST the Dow Jones Industrials was 0.50% or 90.50 points lower to 17,894.10, the S&P had lost 0.72% or 15.33 points to 2,100.04 and the Nasdaq Composite was down by 0.99% or 49.19 points at 4,909.45.

The yield on the benchmark 10-year US Treasury bond was down by four basis points to 1.65%, while that on the policy sensitive two-year note was down by two basis points at 0.75%.

Gold was again higher, albeit by the slightest of margins, with the COMEX-traded futures contract for August delivery edging higher by 0.02% to $1,273.00/oz..

Heading the other way, oil prices declined as the dollar strengthened with US crude falling back below $50 a barrel. A stronger dollar is seen to weaken demand for crude as it makes imports bought in the currency more expensive.

Front month West Texas Intermediate crude oil futures were down by 2.04% to $50.91 per barrel on NYMEX.

Optimism on the hiring front

The University of Michigan's consumer confidence index for the start of June drifted lower from 94.7 to 94.3.

Economists had been expecting a reading of 94.0.

"The stability in consumer sentiment supports the view that the slowdown in May job growth was not a reflection of a broad-based downturn across the economy. Should job growth bounce back, as we expect it will, sentiment and spending should be key beneficiaries," Barclays's Jesse Hurwitz said in a research note sent to clients.

Brexit concerns in the air

Adding to the cautious tone, worries about Britain’s June 23 referendum on European Union membership intensified after Shadow Home Secretary Andy Burnham warned there was a "very real prospect" of a Leave vote.

Burnham’s remarks came as the Labour Party on Friday claimed that leaving the EU could lead to £18bn of spending cuts and tax rises.

On the company front, Twitter shares fell trade after the social-media company on Thursday notified millions of users that their accounts are at risk of being taken over. A survey also showed Instagram was attracting more advertising than Twitter.

Tesla Motors slid after the electric car maker came under investigation for a potential defect in the suspension of its Model S.

H&R Block jumped after the tax-preparation specialist reported better-than-expected quarterly results.

Shares in Sophiris Bio rocketed after the biotech company reported promising results in a mid-stage clinical trial of its prostate cancer treatment.